Private Equity Exits are on the Rise in Asia:
Marsh
SINGAPORE, May 28, 2012 /PRNewswire-Asia/ --
Increased demand for warranty and indemnity (W&I) insurance
from private equity firms heralds a new wave of investment activity
as private equity firms look to exit investments made during Asia＊s
buyout boom of 2007, according to a new report published today by
Marsh.
According to Marsh＊s report, Dealmakers Turn To
Warranty and Indemnity Insurance To Mitigate Deal
Risk( http://www.marsh-asia.com/pdf/2012/WII_REPORT.pdf ),
an increase in demand for W&I insurance has accompanied a
resurgence in M&A activity so far in 2012 and sets the scene
for even more activity in the second half of the year. Warranty and
indemnity insurance (W&I insurance), an insurance product
relatively new to Asia, is gaining popularity as the preferred tool
to protect the interests on both the sell side and buy side of
transactions.
※In the first quarter of 2012 in Asia, Marsh
received as many requests for W&I insurance as the whole of
2011,§ said Josh Roach, Asia Leader for Marsh＊s Private Equity and
M&A Services Practice. ※This growth in demand reflects a more
risk-aware approach by investors than during the boom years of 2006
and 2007, as sellers look to minimise their liability upon
exit.
※We are seeing two distinct deal trends in Asia. The
first is increased deal activity within Southeast Asia, such as
Singapore-based investors buying and selling assets in Malaysia and
Indonesia. The second is an increase in outbound M&A activity
from China and Japan, with companies looking to buy opportunistic
assets in Europe.§
During share and asset sales it is common for the
seller to provide warranties to the buyer on a broad range of
matters about the target, such as title to shares, property,
employment, tax, intellectual property and other commercial
matters. W&I insurance (also know as ＆Reps and Warranties＊
insurance) is an insurance solution which provides recourse against
breaches of the warranties and indemnities being given by the
seller in the sale and purchase agreement.
About Marsh＊s Private Equity and M&A
Services
Marsh＊s Private Equity and M&A Services is a
dedicated team of specialists focused on the risk and insurance
issues that influence negotiations and the long-term financial
success of a transaction. Established for over 20 years, our global
practice of over 130 professionals has advised on over 10,000
transactions around the world. These transactions include mergers
& acquisitions, divestments, infrastructure investments, public
to private partnerships (PPPs), private finance initiatives (PFIs),
privatizations and structured finance
transactions.
About Marsh
Marsh( http://usa.marsh.com ), a global leader
in insurance broking and risk management, teams with its clients to
define, design, and deliver innovative industry-specific solutions
that help them protect their future and thrive. It has
approximately 26,000 colleagues who collaborate to provide advice
and transactional capabilities to clients in over 100 countries.
Marsh is a wholly owned subsidiary of Marsh & McLennan
Companies( http://www.mmc.com ) (NYSE: MMC),
a global team of professional services companies offering clients
advice and solutions in the areas of risk, strategy and human
capital. With 53,000 employees worldwide and annual revenue
exceeding $11 billion, Marsh & McLennan Companies is also the
parent company of Guy Carpenter( http://www.guycarp.com ), a global
leader in providing risk and reinsurance intermediary services;
Mercer( http://www.mercer.com/home ), a global
leader in human resource consulting and related services; and
Oliver Wyman( http://www.oliverwyman.com/index.html ),
a global leader in management consulting. Follow Marsh on Twitter
@Marsh_Inc( http://twitter.com/@Marsh_Inc ).
SOURCE﹛Marsh (Singapore) Pte Ltd